McCaw’s six-year-old business needed a dose of magic. Nobody doubts that McCaw Cellular is a dominant force in the marketplace. But the company, launched by him and his three brothers in 1987, has turned an annual profit only once–and that came from selling off several franchises. A $5 billion debt load also puts a damper on prospects for expansion. If antitrust authorities and the Federal Communications Commission approve, the buyout should solve those problems by linking McCaw with a financial powerhouse that possesses the best-known brand name in communications. Unlike a previous proposal that called for AT&T to buy one third of McCaw and perhaps swallow the rest later, the new merger pact would immediately give AT&T the country’s largest wireless network. “The deal has evolved into a full-blown merger for good reasons,” says Salomon Brothers analyst Frederick W. Moran. “[It] will make AT&T/McCaw a potent, coordinated force.”
The happiest partner in the union is sure to be 44-year-old McCaw, who stands to become an instant billionaire. Already the wealthiest CEO in Washington state next to Microsoft mogul Bill Gates, the man who was among the first to peddle wireless telephones is an enigma to friends and associates. Like the figure at the end of the Yellow Brick Road, he is a reclusive sort who rarely speaks publicly or gives interviews. (He spirited himself away on a vacation shortly after announcing last week’s merger.) Since his childhood in Seattle, he has suffered from a mild form of dyslexia, a disorder that causes him to see letters slightly out of order. But associates say McCaw, who has been known to engage his employees in food fights and squirt-gun battles, makes up for his lack of verbal acumen with a remarkable grasp of the business. “Craig’s not known as a fast talker or a demon salesman,” says Nathan Myhrvold, a senior vice president at Microsoft. “He’s a philosopher of business. He has insight that is quite unique and he’s able to translate that into something of redeeming value.”
Once the merger is consummated, McCaw will no longer be involved in day-to-day operations, although he will sit on AT&,T’s board. And what will he do with $1 billion and lots of free time? His dream, the environmentally minded McCaw has said, is to build a company to convert soybean oil into a nonpolluting fuel for diesel engines. Even for a man who calls himself the Wizard of Oz, that may be a difficult trick.
